If the remains of failed financial engineer Babcock & Brown Limited retain even a skerrick of contestable value then litigation funder Bookarelli Pty Ltd surely represents the most determined maggot on the carcass.
“… if the Deed is terminated, rescinded or otherwise expires, all provisions of the Deed that are to the Liquidator’s or the Company’s advantage will survive, however those provisions of the Deed that are to the Bookarelli Parties’ advantage will not survive.” Justice Ian Jackman.
Never mind the failed shareholder class actions, failed appeals to the highest courts and mounting costs amassed in favour of Babcock’s liquidator David Lombe.
Bookarelli’s moving minds have since 2012 persisted in their pursuit of a pay day to such a degree that last month Lombe agreed to enter into a deed of full and final settlement, rather than chase the aging antagonists for the millions in legals he’s incurred defending their specious claims.
Details of the agreement were made public this week when Federal Court Justice Ian Jackman delivered judgment in Lombe (liquidator), in the matter of Babcock & Brown Limited (in liq) [2025] FCA 1180.
The judgment deals with Lombe’s application for court approval for his entry into a deed of settlement and release nuns pro tunc more than 16 years after the Deloitte special principal was appointed liquidator of B&B in the wake of the Global Financial Crisis, which as most iNO readers will recall deprived companies of Babcock’s ilk of the kind of life blood only the frothiest capital markets supply.
Justice Jackman however provides an excellent chronology in respect of the ensuing litigation between Bookarelli and Lombe as the former sought to prove that certain groups of Babcock shareholders were eligible creditors due to failures by Babcock to provide certain information to the market in accordance with its disclosure obligations as an ASX-listed entity.
And despite loss after loss and adverse costs ordered against Bookarelli with each loss, it wasn’t giving up.
As 2024 rolled into this year and Lombe sought a permanent stay of what is known as the Pain Proceedings Bookarelli commenced a new proceeding in March, though it had progressed only to the point of Lombe filing his defence when the parties entered into the settlement deed in mid-August, days before the Pain stay application was scheduled to be heard.
Reading the judgment its clear a settlement is the best option from a lot of unsatisfactory outcomes.
Bookarelli have only paid one lot of costs. At least $2.8 million worth of costs orders will have to come out of Babcock creditors’ pockets. As will the $4 million Lombe’s incurred successfully defending Bookarelli’s assaults.
Yet Lombe’s decision to settle also suggests his threats of recovery actions against Babcock shareholders who assigned their claims to Bookarelli, which iNO reported on in February, were either empty or unenforceable.
According to the evidence he put before the court Lombe thinks entry into the deed gives him his best chance in 16 years to pay a dividend to creditors and conclude the winding up of Babcock & Brown.
Its terms and conditions prevent Bookarelli from commencing any new proceedings in the time that remains between the parties’ entry into the deed and the date the cadaver’s deregistered at the ASIC crematorium.
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